Industrial energy demand has steadily increased over the last two decades at annual rate of around 9%. In 2019, the industrial sector was responsible for 33% of the total final energy consumption, accounting for 44% of final electricity demand. To be 1.5°C compatible, share of electricity in industrial energy mix would need to reach 76-80% by 2050 from 28% in 2019. Different scenarios demonstrate a rapid decline in direct CO₂ emissions from the industrial sector to 2-6 MtCO₂/yr by 2050, from 25 MtCO₂/yr in 2019, mostly driven by a widespread adoption of energy efficiency measures and an increased penetration of decarbonised electricity (see our analysis of the power sector in Bangladesh).
Energy demand for the industrial sector is currently dominated by fossil fuels (i.e. 73% in 2019), mostly natural gas. All scenarios except one demonstrate a declining trend of fossil energy demand by 2030.
In 2015, the Ministry of Power, Energy and Mineral Resources launched Energy Efficiency and Conservation Master Plan up to 2030, outlining how to reduce the industrial sector’s energy intensity by 20% by 2030 (compared to 2013 levels). Through energy efficiency and conservation measures, it also aims to reduce the sector’s energy consumption by 20%, leading to up to a 10.5% reduction in total energy consumption. Additionally, the Green Transformation Fund (GTF) of Bangladesh (USD$ 200 million) finances manufacturing technology upgrades for energy and water efficiency outcomes, and was recently expanded to include all subsectors.